Exhibit 10(at)


 


EMPLOYMENT CONTINUITY AGREEMENT


 


This Agreement
made as of this 9’’ day of May, 2000, by and between MAINE PUBLIC SERVICE
COMPANY, a Maine corporation with its principal place of business in Presque
Isle, Maine (the “Company”) and Calvin D. Deschene of Presque Isle, Maine,
(“Director”).


 


WHEREAS, the
Director has been employed by the Company and its energy marketing subsidiary,
Energy Atlantic, LLC (EA), in a management capacity for over 13 years, and is
now the Director of EA; and


 


WHEREAS, the
Director’s knowledge of EA’s affairs and his experience are critical to the
protection and enhancement of the best interests of the Company, its employees,
ratepayers and stockholders; and


 


WHEREAS, in the
current competitive energy market the continuing operation of EA cannot be
assured; and


 


WHEREAS, the
Company desires to assure itself of the continued employment of the Director
and the benefit of his independent judgment in the operation of EA,
particularly in light of the uncertainties concerning EA’s future as an
affiliated energy marketer;


 


NOW, THEREFORE, in
consideration of the mutual promises and undertakings herein contained and for
other good and valuable consideration, the receipt and adequacy of which is
acknowledged by each of the parties, the Director and the Company agree as
follows:


 


1.             Term of the
Agreement and Renewal. The term of this Agreement shall be for a period
beginning May 9, 2000, and ending December 31, 2001. On January 1, 2002, and on
January 1 of each period of three (3) years thereafter (in each case such date
to be a “Renewal Date”) this Agreement automatically shall be renewed for an
additional three (3) year term, unless at least one (1) year prior to any such
Renewal Date, either party shall have given written notice to the other that
such renewal shall not take place. Such notice may be given by the Company only
upon the affirmative vote of the Compensation Committee of the Board of
Directors.


 


2.             Rights Upon
Involuntary Termination of Employment. If (i) within twenty-four (24)
months after the occurrence of a Change in Control Event, the Company
terminates the Director’s employment for any reason other than Good Cause as
defined in Paragraph 4, or if the Director voluntarily terminates employment
for Good Reason as defined in Paragraph 3, or (ii) at any time during the term
of this Agreement, or any extension thereof, EA shall effectively cease doing
business (regardless of any formal dissolution or winding up of EA) and the
Officer is not offered a position with the Company at a base salary and a level
of employee benefits substantially the same as EA provided to him immediately
prior to its cessation of operations, the Company shall provide the Director
with the following:


 


(a)           Within thirty (30) days
of such termination, a lump sum cash payment in an amount equal to the sum of:


 

















 


(i)                one hundred
percent (100%) of the Director’s annual base salary in effect upon the date of
the Change in Control Event or when EA ceased doing business, whichever
applies, and


 


(ii)               one hundred percent
(100%) of the award the Director would have received for the year in which such
termination occurs, pursuant to the EA Incentive Compensation Plan, assuming
that his employment had not terminated and that for such year all applicable
performance goals will be met. In the event any portion of this award depends
on goals that cannot be determined until the close of the Plan Year, then
payment of that amount shall be made within 30 days after the goal has been
determined.


 


(b)              The continuation of
the Director’s participation and the participation of his dependents (to the
extent they were participating prior to his termination of employment) in EA’s
health, life, disability and other employee benefit plans, programs and
arrangements (excluding the Pension Plan and the Non-Union Retirement Savings
Plan) for a period of twenty-four (24) months after such termination as if he
were still employed during such period; provided, however, if such
participation in any such plan, program or arrangement is specifically
prohibited by the terms thereof, the Company shall provide the Director (and
his dependents) with benefits substantially similar to those which he was
entitled to receive under such plan, program or arrangement immediately prior
to his termination of employment. Additionally, at the end of any period of
such coverage, the Director shall have the right to have assigned to him, for
the cash surrender value thereof, any assignable insurance owned by EA on the
life of the Director. For purposes of this Paragraph 2(b), any employee benefit
determined with reference to the Director’s compensation or earnings shall be
based on his annual base salary unless otherwise provided under the terms of
the applicable employee benefit plan, program or arrangement.


 


(c)             The Company shall pay
the Director an amount equal to the award he would have been entitled to
receive under EA’s Incentive Compensation Plan, if his employment had not
terminated, based on the base salary he had earned as of his termination date,
and assuming that for such year all applicable performance goals will be met.
Such payment shall be made within ninety (90) days after his employment
terminates, except that if any portion of the amount depends on goals that
cannot be determined until the close of the Plan Year, then payment of that
amount shall be made within 30 days after this goal has been determined.


 


3.               Termination for
Good Reason. For purposes of this Agreement, termination by the Director of
his employment for “Good Reason,” except upon the Director’s express written
consent otherwise, shall mean:


 


(a)           the assignment of
duties to the Director which:


 


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(i)              are materially
different from his duties immediately prior to the change in Control Event, or


 


(ii)             result in his having
significantly less authority or responsibility than he had prior to the Change
in Control Event; or


 


(b)             the Director’s
removal from, or any failure to re-elect him to, any position he held
immediately prior to the Change in Control Event with EA; or,


 


(c)             a reduction of the
Director’s annual base salary in effect on the date of the Change in Control
Event or as the same may be increased from time to time thereafter; or


 


(d)             the Company’s
transferring or assigning the Director to a place of employment more than
twenty-five (25) miles from Presque Isle, Maine, except for required business
travel to an extent substantially consistent with his business travel
obligations immediately prior to the Change in Control Event; or


 


(e)             the Company’s failure
to provide the Director with substantially the same health, life and other
employee benefit plans, programs and arrangements (specifically including EA’s
compensation and incentive plans, as the same may be amended in the future),
and substantially the same perquisites of employment, as provided to him
immediately prior to the Change in Control Event or as the same may be
increased thereafter; or


 


(f)              the Company’s
failure to provide the Director with substantially the same support staff as
provided to him immediately prior to the Change in Control Event; or


 


(g)             the Company’s failure
to increase the Director’s salary, employee benefits or perquisites of
employment in a manner or amount commensurate with increases provided to the
Company’s other executive officers; or


 


(h)             the Company’s failure
to obtain from any successor a satisfactory agreement to assume and perform the
terms of this Agreement.


 


4.               Termination by
Reason of Death or for Good Cause. 
Notwithstanding any provision of this Agreement to the contrary, no
benefits are payable hereunder upon the Director’s death prior to his
involuntary termination of employment pursuant to Paragraph 2 or voluntary
termination of employment for Good Reason pursuant to Paragraph 3. The Company
retains the right to terminate the Director for “Good Cause,” in which event he
shall not be entitled to receive any payment or benefits pursuant to this
Agreement. “Good Cause” shall mean:


 


(a)           the Director’s
conviction, by a court of competent jurisdiction, of a crime adversely
reflecting on his honesty, trustworthiness or fitness to carry out the
responsibilities of his position with the Company in other respects; or


 


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(b)             a willful breach by
him of any material duty or obligation imposed upon him under the terms of his
employment, as those terms existed immediately prior to any Change in Control
Event, and his failure to cure such breach within thirty (30) days after
receiving notice thereof from the Company.


 


5.               “Change in
Control Event.” Each of the following events shall constitute a “Change in
Control Event” for purposes of this Agreement:


 


(a)             Any person acquires
beneficial ownership of Company securities and is or thereby becomes a beneficial
owner of securities entitling such person to exercise twenty-five percent (25%)
or more of the combined voting power of the Company’s then outstanding stock.


 


For purposes of
this Agreement, “beneficial ownership” shall be determined in accordance with
Regulation 13D under the Securities Exchange Act of 1934, or any similar
successor regulation or rule; and the term “person” shall include any natural
person, corporation, partnership, trust or association, or any group or
combination thereof, whose ownership of Company securities would be required to
be reported under such Regulation 13D, or any similar successor regulation or
rule.


 


(b)           The Company ceases to
be a reporting company pursuant to Section 13(a) of the Securities Exchange Act
of 1934 or any similar successor provision.


 


(c)           The number of the
Company’s Outside Directors, as defined herein, is decreased by more than fifty
percent (50%) in any twenty-five (25) month period or the number of the
Company’s directors is increased such that the Outside Directors constitute
less than a majority of the Board.


 


(d)           Within any twenty-five
(25) month period, individuals who were Outside Directors at the beginning of
such period, together with any other Outside Directors first elected as
directors of the Company pursuant to nominations approved or ratified by at
least two-thirds (2/3) of the Outside Directors in office immediately prior to
such respective elections, cease to constitute a majority of the board of
directors of the Company.


 


(e)           The Company is subject
to a change in control which would require reporting in response to Item 1 of
Form 8-K under Regulation 13a- 11 promulgated under the Securities Exchange Act
of 1934, as amended, or any similar successor statute or rule, whether or not
the Company is a reporting company under such Act.


 


(f)           The Company’s
stockholders approve:


 


(i)            any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of Company common stock would be
converted into cash, securities or other property,


 


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other than a
merger or consolidation of the Company in which the holders of the Company’s
common stock immediately prior to the merger or consolidation have
substantially the same proportionate ownership and voting control of the
surviving corporation immediately after the merger or consolidation; or


 


(ii)             any sale, lease,
exchange, liquidation or other transfer (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company.


 


Notwithstanding
subparagraphs (i) and (ii) above, the term “Change in Control Event” shall not
include a consolidation, merger, or other reorganization if upon consummation
of such transaction all of the outstanding voting stock of the Company is
owned, directly or indirectly, by a holding company, and the holders of the
Company’s common stock immediately prior to the transaction have substantially
the same proportionate ownership and voting control of the holding company.


 


(g)           50% or more of either
the Company’s interests in or the assets of EA are sold, leased, exchanged or
otherwise transferred to any person who is not an affiliate of the Company
under 35-A M.R.S.A. § 707, regardless of whether any Change of Control Event
occurs with respect to the Company.


 


6.             Outside Directors.
For purposes of this Agreement, an “Outside Director” as of a given date shall
mean a member of the Company’s board of directors who has been a director of
the Company throughout the six (6) months prior to such date and who has not
been an employee of the Company at any time during such six (6) month period.


 


7.             Notices. Any
and all notices required or permitted to be given hereunder shall be in writing
and shall be deemed to have been given when deposited in the United States
mails, certified or registered mail, postage prepaid and addressed as follows:


 


To
the Director:                    Calvin
D. Deschene


27 Hillside Street


Presque Isle, ME
04769-2425


 


To
the Company:                 Maine
Public Service Company


P. 0. Box 1209


Presque Isle,
Maine 04769-1209


 


Either
party may change by notice to the other the address to which notices to it are
to be addressed.


 


8.             Applicable Law,
Taxes, Binding Agreement, Severability, Construction.


 


(a)          This Agreement shall be
governed by and construed in accordance with the laws of the State of Maine,
except as to any matter which is preempted by federal law.


 


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(b)             Notwithstanding
anything to the contrary herein contained, the Company may withhold from any
amounts payable under this Agreement all federal, state or other taxes or
assessments which may be required by applicable statute or regulation to be
withheld.


 


(c)             This Agreement shall
be binding upon and inure to the benefit of the Director his heirs, assigns,
executors and legal representatives; and the Company, its successors and
assigns.


 


(d)             If any provision of
this Agreement shall be held invalid or unenforceable by a court of competent
jurisdiction, the remainder of this Agreement shall not be affected thereby.


 


(e)             The Outside Directors
shall have the authority to construe and interpret this Agreement on behalf of
the Company, and any such determination by the Outside Directors shall be
conclusive on the Company.


 


9.               Limitation on
Amount to be Paid. If payment of any amount under this Agreement would
cause the Director to be subject to an excise tax pursuant to Section 4999 of
the Internal Revenue Code (as amended from time to time) or the regulations
thereunder, then such amount shall not be paid to the extent necessary to avoid
the imposition of such tax. The preceding sentence shall apply only if the
aggregate amount payable to the Director or for his benefit under the
Agreement, after payment of such excise tax, would be less than the aggregate
amount payable in accordance with the preceding sentence.


 


10.           Funding. This
Agreement shall not be construed to create or require the Company to create a
trust or to otherwise act to fund the amounts payable hereunder.


 


11.           Assignment.
Except as required bylaw, the right to receive payments hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy
of any kind, and any attempt to cause such payments to be so subject shall not
be recognized by the Company.


 


12.           Execution of Further
Documents.  In the event the
Director receives payments or benefits pursuant to the terms hereof and the
Company’s independent counsel deems it necessary for the Company to receive a
release or other acknowledgment, the Director agrees to execute any such
document, as may be reasonably required as a condition of his receipt of such
payment or benefits.


 


13.           Amendment and
Waiver. The Agreement may be amended only in writing, by the parties
hereto, and no condition or provision of the Agreement may be waived except in
writing. Waiver by either party at any time of the other party’s breach of, or
failure to comply with, any condition or provision of this Agreement to be
performed by such other party shall not be deemed a waiver of any other
provision or condition at the same time or of any provision or condition at any
prior or subsequent time, unless specifically stated therein.


 


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14.        Arbitration. In recognition
of the mutual benefits of arbitration, the parties hereby agree that
arbitration as provided for herein shall be the exclusive remedy for resolving
any claim or dispute arising under this Agreement, and hereby mutually waive
any and all other remedies at law or in equity for determining any such claim
or dispute.


 


(a)        Any arbitration under this
Agreement, and any related judicial proceeding, shall be initiated and shall
proceed pursuant to the provisions of the Maine Uniform Arbitration Act (the “Act”)
and, to the extent consistent with the Act, the then prevailing rules of the
American Arbitration Association (the “Association”) for labor and employment
contracts. To initiate arbitration hereunder, demand shall be given in writing
to the Association and the other party no later than one year after the claim
arises. Any claim for which such demand is not made within one year after the
claim arises shall be barred and discharged absolutely.


 


(b)        Any arbitration under this
Agreement shall be before a single arbitrator, and an award in such arbitration
may include only damages which the arbitrator determines to be due under
express provisions of this Agreement. The arbitrator shall have no authority to
award any other damages, including without limitation, consequential and
exemplary damages. Any award in arbitration shall be subject to enforcement and
appeal pursuant to the Act.


 


(c)       The parties shall share
equally all costs and fees charged by the Association or the arbitrator.


 


15.      No Additional Effect.
Except as expressly provided herein, nothing contained herein shall be
construed to provide the Director with any specific period of employment, right
to be retained in the service of the Company or EA or other rights, nor shall
this Agreement be construed to otherwise limit the rights of the Company to
discharge or take other action with respect to the Officer.


 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written. 


 


	
  Witness:

  	
   

  	
  MAINE PUBLIC SERVICE
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Paul R. Cariani

  	
   

  	
  By

  	
  /s/ Nathan L. Grass

  	
   

  
	
   

  	
  Its Chairman,
  Executive Compensation

  	
   

  
	
   

  	
  Committee

  	
   

  
	
   

  	
   

  
	
  /s/ Stephen A. Johnson

  	
   

  	
  /s/ Calvin D. Deschene

  	
   

  
	
   

  	
   

  	
  Director  Calvin D. Deschene

  
						



 


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